The Caravan Rolls On
There are key takeaways for the apparel sector:
Sourcing in an uncertain world: the macrostate at play. Apparel executives must continue dealing with a volatile, fast-changing environment along with heightened competition and increasingly savvy consumers. That is driving an urgent search for greater efficiency and flexibility along the end-to-end sourcing chain.
In search of the sourcing caravan’ s next stop. In recent decades, apparel buyers have relentlessly shifted sourcing to lower-cost countries—“ the next stop of the sourcing caravan.” Today, the search for the caravan’ s next stop is as active as ever, but there are new dynamics at play. Some traditional low-cost countries are losing their attractiveness, while sourcing executives are showing keen interest in newer markets— particularly Vietnam, Myanmar, and Ethiopia. As companies seek to step up their agility, however, there is also fresh focus on proximity sourcing and re-shoring.
Digitisation—“ the next sourcing country.” Digitisation could enable apparel companies to achieve a step change in performance, transform to a customer-centric operating model, and create transparency throughout their global supply chains. As one participant at McKinsey’ s 2016 Apparel Sourcing Roundtable put it:“ Digitisation will be the next sourcing country.” But the apparel industry is still at the beginning of its digitisation journey; companies need to accelerate digitisation and integrate it into their broader transformation. Those that succeed will break down silos between sourcing and product development, shorten lead times, lower costs, and increase transparency to manage sustainability.
The future of sourcing. While the industry will face continued volatility and complexity, the sourcing executives surveyed also expressed hope that they could achieve mastery in this uncertain environment. Digitisation will support them in improving predictability, efficiency, decision-making, and accuracy— not just in sourcing, but throughout their business. The time to start is now.
Source: Digitization: The next stop for the apparel-sourcing caravan; McKinsey & Company
At the retail stage, brands and chains are already making use of big data and artificial intelligence. San Franciscobased Stitch Fix, which processes data from clients’ preferences and falls back on the expertise of inhouse stylists, has made waves for the manner in which it married data with fashion. It encourages shoppers to try clothes on through a subscription service, buy whatever they like, and then return the rest free of charge. There was no need to go to a store. The data crunching has worked, and the pilot project has been a success.
Qiaoran Huang and Joshua Hupper founded Babyghost in downtown Manhattan in 2010. Qiaoran graduated from Donghua University, and came to the United States to study at Parsons. She interned for Diane Von Furstenberg and later worked for Nathan Jenden. Joshua also interned for Diane Von Furstenberg before working for Thakoon and Nathan Jenden. Pic courtesy: Babyghost
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